Tag: axis bank

IBA fears precedent, wants govt to pay ‘interest on interest’, BFSI News, ET BFSI

Banking & Finance

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The Indian Banks’ Association (IBA) has sent a communication to the Finance Ministry to pay the compound interest charged to borrowers with loans above Rs 2 crore during the moratorium period of March 1 to August 31, 2020.

Though most private banks have provided for the compound interest waiver, bankers are of the view such a move will set a precedent and want the government to foot the bill. They are expecting a reversal benefit on the interest on interest payment, according to a report.

The Supreme Court order

The Supreme Court in its order last month had directed the government and the RBI to waive penal interest charges on all loans, while rejecting the demand of borrowers to extend the repayment moratorium beyond August 31 and for a complete interest waiver. The loan moratorium scheme was aimed at giving temporary relief to borrowers.

In November last, the government decided to waive interest-on-interest for borrowers below loan exposure of Rs 2 crore. It paid nearly Rs 6,000 crore to lenders to compensate them for the income loss.

Bank provisions

After waiting for the government to burden the compound interest on loan waivers, top banks have provided for payment in the fourth-quarter results.

HDFC Bank has provided Rs 500 crore for interest on interest while ICICI Bank said it has kept Rs 175 crore aside for it, according to the Q4 results announced by these banks. Axis Bank has provided Rs 160 crore while Mahindra Finance has made a provision of Rs 32 crore.

How much does it cost?

Waiving compound interest on loans above Rs 2 crore could cost nearly Rs 4,000 crore to public sector banks, Rs 2,500 crore to private banks and another Rs 1,000 crore to non-bank lenders.

While ICICI Securities had put the total compound interest burden on loans above Rs 2 crore at Rs 11,700 crore, other analysts have put it between Rs 7,000 crore and Rs 10,000 crore. As per rating firm ICRA, compound interest for six months of moratorium across all lenders is estimated at Rs 13,500-14,000 crore.

The Indian Bank Association has recently finalised a methodology for the calculation of the interest on interest component.

Under the norms, borrower accounts which were standard as on February 29, 2020, including SMA­0, SMA­1 and SMA­2 will be eligible for the refund. All loans, working capital, trade products, outstanding during the moratorium period shall be considered for the compound interest waiver.

The government stand

The government had reimbursed banks for forgoing compound interest, or interest on interest, on loans up to Rs 2 crore outstanding during March-August last year, when borrowers had the option to seek a moratorium on repayments.

Lenders have been charging compound interest on larger amounts, but the Supreme Court order means they must now refund it to borrowers. Banks were hoping that the government will take on the burden by enhancing the scope of the ex-gratia scheme to cover the additional refund after the apex court order.



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Axis Bank board approves re-appointment of Amitabh Chaudhry as MD & CEO, BFSI News, ET BFSI

Banking & Finance

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Private sector lender Axis Bank on Thursday said its board has approved the re-appointment of Amitabh Chaudhry as its Managing Director and CEO for three years with effect from January 1, 2022.

“The board of directors of the bank.. considered and approved the proposal relating to re-appointment of Amitabh Chaudhry as the Managing Director and CEO of the bank, for a further period of 3 years, with effect from January 1, 2022 up to December 31, 2024,” Axis Bank said in a regulatory filing.

The appointment will be subject to the approval of the Reserve Bank of India (RBI) and shareholders of the bank, the filing added.

Chaudhry was appointed as Managing Director (MD) and CEO of Axis Bank for a period of three years, with effect from January 1, 2019 up to December 31, 2021.

Prior to joining Axis Bank, Chaudhry was MD and CEO of HDFC Standard Life Insurance Company.



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Axis Bank says collections may slow in the coming weeks, BFSI News, ET BFSI

Banking & Finance

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Axis Bank which swung to profit in the January-March quarter sees collections slowing in the coming weeks as Covid curbs restrict movement.

“We see corporates adopting wait and watch and given the sudden surge, the focus is on employee health and safety. We have not seen any slowdown in early bucket collections, but it is likely to get impacted in the coming weeks because people are not able to meet customers,” Managing Director and Chief Executive Officer Amitabh Chaudhry said. “Our balance sheet is strong and we have taken provisions upfront and have more than decent buffers built in.”

Chaudhry said there will certainly be an impact of the second wave on the economy in the short term but hoped that the wave gets contained quickly with the various strategies being adopted by the government. He said the bank will have to change its policies on risk as per the evolving scenario. He said the bank grew in FY21 as well despite the adversities on the overall economic front and would continue with the same strategy as it believes that the crisis also creates opportunities.

The Q4 results

Beating analyst estimates, Axis Bank reported a net profit of Rs 2680 crore in January-March as compared to a loss of Rs 1,390 crore a year ago. Net interest income rose 11% on year to Rs 7,560 crore, while other income rose 17% at Rs 4,670 crore. Trading income rose nearly three-fold to Rs 790 crore. Axis Bank’s loan book grew 12% on year to Rs 6.4 lakh crore. Domestic loans grew 10% on year, higher than the industry average growth of around 6%.

It disclosed that it had received Rs 3,004 crore of restructuring requests under the special COVID-related window, of which Rs 1,848 crore have been invoked and Rs 623 crore have been implemented.

The bank will take a call on the rest by the June deadline.

The metrics

The total Covid-related provision buffer stood at Rs 5,000 crore (0.8% of loans), while the total additional provision buffer (Covid, standard and restructured) stood at 2% of loans.

Gross slippages were in line with expectations. About 64% of gross slippages were from the retail book. Thus, the annualized retail slippage ratio stood at 3.7%.

The loan book grew 7% sequentially with strong growth across segments. This was led by retail loans growing at 5% sequentially and retail disbursements rising at an all-time high of 44% quarter on quarter (QoQ). Also, the corporate/SME portfolio grew 9%/9%. On the liability front, deposits were up 8% QoQ, led by 13% QoQ growth in CASA deposits; thus, the CASA ratio improved to 45% (quarterly avg. CASA stood at 42%).

Analyst view

Axis Bank has delivered a strong performance and appears well-positioned to report robust earnings traction. Moreover, moderation in fresh slippages, coupled with improved underwriting and an increasing retail mix, would help maintain strong credit cost control. On the business front, retail disbursements reached an all-time high during the quarter, with strong disbursements seen in home loans (+45% QoQ) and LAP (+51% QoQ).

“The bank delivered strong sequential growth across segments. On the asset quality front, total restructuring stood at 0.3% of loans. Furthermore, the bank has an estimated 72% coverage on GNPL and also holds an additional provision buffer of 2% to protect the balance sheet against any potential stress,” Motilal Oswal Securities said in a note.

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RBI’s CEO tenure cap: Here’s how it will impact Uday Kotak; HDFC Bank, ICICI Bank, Axis Bank safe

Personal Finance

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Analysts believe that this development is marginally negative for Kotak Mahindra Bank, as Uday Kotak, the promoter MD and CEO, will not be eligible for reappointment once his term gets over.

The Reserve Bank of India’s (RBI) final guidelines on the tenure of bank MD, CEOs, or Whole Time Director (WTD) will apply to private lenders, small finance banks (SFBs), and wholly-owned subsidiaries of foreign banks. Under the new guidelines, the post of MD and CEO of a private bank cannot be held by the same individual for more than 15 years in one go. While, in the case of a promoter MD/CEO, the tenure will be capped at 12 years. RBI has noted that under special circumstances and at the discretion of the apex bank, the term for promoter CEO may be extended up to 15 years. “Banks such as HDFC Bank, ICICI Bank, and IndusInd Bank had a change at the helm in the recent past. However, banks like Kotak Mahindra Bank, DCB Bank, City Union Bank, Federal Bank, and RBL Bank have long-running tenures (+10 yrs) of the current MDs,” said Siji Philip and Dnyanada Vaidya, research analysts, Axis Securities.

RBI guidelines negative for Kotak Mahindra Bank

For Kotak Mahindra Bank and City Union Bank, the term extension has already been done till 2024 and 2026, respectively. Analysts believe that this development is marginally negative for Kotak Mahindra Bank, as Uday Kotak, the promoter MD and CEO, will not be eligible for reappointment once his term gets over. However, he will continue to remain a stakeholder in the bank. Uday Kotak got reappointed on January 1, 2021, for a period of three years. “Hence, his tenure will now end on 1 Jan 2024 and he is not eligible for reappointment as he has already completed 15 years as the MD and CEO,” said Suresh Ganapathy, analyst at Macquarie Research in a note.

Banks to comply with RBI guidelines by Oct 1, 2021

Ganapathy also said that the second in line Dipak Gupta (current Joint MD) may not be eligible to succeed Kotak as the CEO as the 15 year cap applies for all whole-time directors (WTD) on the board. RBI circular also stated that the upper age limit for MD and CEO and WTDs in the private sector banks would continue and no person can continue as MD and CEO or WTD beyond the age of 70 years. Banks are permitted to comply with these instructions latest by October 01, 2021. It should be noted that banks with MD and CEOs or WTDs who have already completed 12 or 15 years as MD and CEO or WTD, on the mentioned date these instructions coming to effect, shall be allowed to complete their current term as already approved by the Reserve Bank.

Kotak Mahindra Bank shares were trading nearly 3 per cent higher at Rs 1,799 apiece on BSE in intraday deals on Wednesday. So far, a total of 46,000 shares have traded on BSE, while a total of 19.40 lakh shares have exchanged hands on NSE. RBI also clarified that the individual will be eligible for re-appointment as MD and CEO or WTD in the same bank, if considered necessary and desirable by the board, after a minimum gap of three years, subject to meeting other conditions. “During this three-year cooling period, the individual shall not be appointed or associated with the bank or its group entities in any capacity, either directly or indirectly,” RBI said.

HDFC Bank, ICICI Bank, Axis Bank seem fine

According to Ganapathy, the CEOs of HDFC Bank, ICICI Bank and Axis Bank have plenty of time and can be the CEO for more than a decade as they were appointed as the CEO recently. HDFC Bank CEO took charge last year whereas ICICI Bank CEO took charge a couple of years ago. Similarly, Axis CEO also can be the CEO for more than a decade.

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Axis Bank back in the black with Q4 net profit of 2,677 cr

Banking & Finance

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This is despite the bank making additional provision aggregating Rs8.0bn on accounting change in provisioning rates on loans to commercial banking segment.

Private lender Axis Bank on Tuesday reported a net profit of Rs 2,677 crore for the March quarter compared to a loss of Rs 1,388 crore in Q4FY20. The lender was back in the black thanks to an 11% year-on-year (y-o-y) growth in its net interest income (NII) to Rs 7,555 crore.

The lender’s operating profit increased 17% y-o-y and 13% quarter-on-quarter (q-o-q) to Rs 6,865 crore. The bottom-line also got a support from reduced provisioning by the lender. Provisions declined 57% y-o-y and 28% q-o-q to Rs 3,295 crore. However, the bank holds provisions of Rs 5,012 crore as on March 31, 2021 against the potential impact of Covid-19.

Amitabh Chaudhry, MD and CEO of the bank, said, “There will be economic impact of the second wave of Covid-19 but we are hopeful that it will be short-lived. We have transformed ourselves in line with the evolving business scenario to become more agile, more relevant and totally dedicated to the needs of millions of customers,” he added.

The net interest margins (NIM) of the lender declined 3 basis point (bps) sequentially to 3.56%, but showed a growth of 1 bps on a y-o-y basis.
The asset quality of the lender improved during the March quarter. Gross non-performing assets (NPAs) ratio of the lender declined 85 bps to 3.7% from 4.55% in the December 2020 quarter. Similarly, the net NPAs ratio declined 14 bps to 1.19% from 0.74% in the December quarter. “Gross slippages during the quarter were Rs 5,285 crore, compared to Rs 7,993 crore during Q3FY21 and Rs 3,920 crore in Q4FY20,” Chaudhry said. “Recoveries and upgrades from NPAs during the quarter remained at Rs 3,462 crore, while write-offs were Rs 5,553 crore,” he added.

The provisioning coverage ratio (PCR) improved to 72% in the fourth quarter, compared to 69% in the same quarter last year. “On an aggregated basis, our provision coverage ratio stands at 120% gross NPAs,” the bank said.

Credit costs for the lender more than halved at 1.21% during the March quarter from 2.77% during Q4FY20.

The fee income during the March quarter stood at Rs 3,376 crore, up 15% y-o-y and 16% q-o-q. Retail fees grew 16% y-o-y and 17% q-o-q and constituted 64% of the bank’s total fee income. The trading profits and miscellaneous income for the quarter stood at Rs 789 crore and Rs 503 crore respectively. Overall, non-interest income for Q4FY21 grew 17% y-o-y to Rs 4,668 crore.

Advances grew 9% y-o-y and 7% q-o-q to Rs 6.23 lakh crore. Retail disbursements for the quarter were at new all-time highs as per lender. Disbursements in the consumer segment were up 45% y-o-y and 44% q-o-q. Similarly, rural disbursements grew 47% on a y-o-y as well as sequential basis.

The total deposits grew by 10% y-o-y to Rs 7.07 lakh crore. On a quarterly average basis (QAB) , savings account deposits grew 17% y-o-y and 6% q-o-q. Retail savings deposits grew 20% y-o-y, current account deposits grew 18% y-o-y and 10% sequentially.

The capital adequacy ratio (CAR) including profit for FY21 stood at 19.12% with CET 1 ratio of 15.4% at the end of March, 2021.

The board has authorised the bank to raise funds up to Rs 35,000 crore. The funds can be raised in Indian or foreign currency by issue of debt instruments including but not limited to long-term bonds, non-convertible debentures, perpetual debt instruments, additional tier 1 (AT 1) bonds, infrastructure bonds and tier II capital bonds.

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Sharp drop in provisions helps lender beat profit estimates, BFSI News, ET BFSI

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MUMBAI: Axis Bank today reported a net profit of Rs 2,677 crore for the quarter ended March as against a net loss of Rs 1,387.8 crore in the year-ago quarter. The lender’s net profit was higher than even the most optimistic of analysts’ estimates.

The bank’s net interest income in the quarter jumped 11 per cent year-on-year (YoY) to Rs 7,555 crore, which was largely in-line with analysts’ estimates.

The bank reported a strong growth of 12 per cent on-year in its loan book, which was higher than analysts’ estimates of 7-9 per cent growth.

The bank reported a strong growth of 12 per cent on-year in its loan book, which was higher than analysts’ estimates of 7-9 per cent growth. The growth in loan was led by corporate loans, which grew 16 per cent on-year, whereas retail loans rose 11 per cent in the reported quarter.

The lender’s asset quality also showed improvement during the quarter as net non-performing assets ratio fell 14 basis points sequentially to 1.05 per cent. For the quarter, the lender’s specific loan-loss provisions were at Rs 7,038 crore as against Rs 4,204 crore in the year-ago quarter.


During the quarter, the Axis Bank made additional provisions of Rs 803 crore on account of change in NPA provision rates on loans to the commercial banking segment, the lender said. The lender’s credit cost also came down sharply to 1.21 per cent for the quarter as against 2.77 per cent a year ago.

The bank said that its overall capital adequacy ratio stood at 19.12 per cent including the Common Equity Tier I ratio of 15.4 per cent. It said that COVID-related provisions of Rs 5,012 crore provided an additional cushion of 69 basis points.

Axis Bank’s operating performance was strong as operating profit jumped 17 per cent year-on-year to Rs 6,865 crore in the reported quarter.

The lender’s top line was affected by a strong quarter for the non-interest bearing functions. Fee income in the quarter grew 15 per cent on-year to Rs 3,376 crore, which helped non-interest income rise 17 per cent on-year to Rs 4,668 crore.

For the financial year, the lender’s net profit more than quadrupled to Rs 6,588 crore, while its net interest income rose 16 per cent to Rs 29,239 crore.

Shares of Axis Bank ended 0.1 per cent higher at Rs 700.9 on the National Stock Exchange.



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Axis Bank Q4 net profit surges to Rs 2,677 crore

Banking & Finance

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Private sector lender Axis Bank reported a sharp rise in its net profit for the quarter ended March 31, 2021 with robust loan growth.

Back in the black, Axis Bank’s net profit stood at Rs 2,677.06 crore in the January to March 2021 quarter as against a net loss of Rs 1,387.78 crore in the same period a year ago. On a sequential basis, its profits grew 140 per cent from Rs 1,116.60 crore in the quarter ended December 31, 2020.

For the full fiscal 2020-21, Axis Bank’s net profit surged 305 per cent to Rs 4,961.28 crore versus Rs 1,627.22 crore in 2019-20.

For the quarter ended March 31, 2021, the private sector lender registered an 11 per cent growth in its net interest income to Rs 7,555 crore from Rs 6,808 crore a year ago. The net interest margin stood at 3.56 per cent in the fourth quarter last fiscal as against 3.55 per cent a year ago.

Other income grew 17.1 per cent to Rs 4,668.3 crore in the quarter under review.

For the fourth quarter of 2020-21, the bank’s provisions fell 57.4 per cent to Rs 3,294.98 crore from Rs 7,730.02 crore a year ago.

“The bank held cumulative provisions (standard + additional other than NPA) of Rs 12,010 crore at the end of the fourth quarter of 2020-21. It is pertinent to note that this is over and above the NPA provisioning included in our PCR calculations,” Axis Bank said in a statement on Tuesday.

Asset quality has improved. Gross non-performing assets stood at Rs 25,314.84 crore as on March 31, 2021 or 3.7 per cent as against 4.86 per cent a year ago. Net NPAs amounted to 1.05 per cent as on March 31, 2021,versus 1.56 per cent a year ago.

The board of directors of the bank have considered it prudent to not propose any dividend for the year ended March 31, 2021, in light of the situation developing around Covid-19 in the country and related uncertainty that it creates, Axis Bank further said.

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RBI’s new rule on tenure will promote younger lot at bank, BFSI News, ET BFSI

Banking & Finance

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The Reserve Bank of India has put a cap on the maximum age of a bank CEO, paving the way for a younger lot to helm banks transitioning into digitalisation.

The Reserve Bank of India has fixed the tenure of MD, CEO and whole-time director (WTD) in a private sector bank at 15 years and prescribed the maximum age of 70 years for such functionaries.

This will lead to a change in succession planning at the banks.

The impact

Uday Kotak, the promoter MD and CEO, got reappointed on January 1, 2021, for three years. His tenure will end on January 1, 2024, and is not eligible for reappointment as he has already completed 15 years as the MD and CEO.

HDFC Bank, ICICI Bank, Axis Bank CEOs have had plenty of time and can be the CEO for more than a decade as they were appointed on the post recently.

IndusInd Bank CEO Sumant Kathpalia took charge last year and can continue at the helm of affairs for more than a decade

Kamakodi, CEO of City Union Bank, will complete his 15-year tenure in May 2026, which will be two years before his retirement.

In the case of Bandhan Bank, if the RBI considers the date of conversion to bank, which is five years ago, then C S Ghosh has a long time ahead.

The upper limit of 15 years for MD and CEOs may increase the scope for a few more years at the helm for banks like DCB, Federal and RBL.

The road ahead

The provision that individual will be eligible for re­appointment as MD and CEO or whole-time director in the same bank after a minimum gap of three years, leaves an opportunity for the promoter-CEO to take the bank helm after a gap of three years

Experts say while the tenure cap benefits new age banks, which need a younger lot to steer them, the bank-promoter CEO enterprise would have an impact.

The new norms will also lead to bigger involvement of independent director and non-executive directors in the bank affairs and help in good governance and vigil. 0

The RBI directives

These directives form part of the instructions issued by the RBI with regard to the chair and meetings of the board, the composition of certain committees of the board, age, tenure and remuneration of directors, and appointment of the WTDs on Monday.

The RBI said it would come out with a Master Direction on Corporate Governance in banks in due course.

“Subject to the statutory approvals required from time to time, the post of the MD & CEO or WTD cannot be held by the same incumbent for more than 15 years.

“Thereafter, the individual will be eligible for re-appointment as MD & CEO or WTD in the same bank, if considered necessary and desirable by the board, after a minimum gap of three years, subject to meeting other conditions,” the RBI said.

It added that during this three-year cooling period, the individual shall not be appointed or associated with the bank or its group entities in any capacity, either directly or indirectly.

With regard to the upper age limit for MD & CEO and WTDs in the private sector banks, the RBI said that no person can continue on such positions beyond the age of 70 years. The banks” boards, however, will be free to prescribe a lower retirement age for the WTDs, including the MD & CEO.

The maximum age limit for chairman and non-executive directors has been fixed at 75 years.



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Banks may skip dividend payments for the second year, BFSI News, ET BFSI

Banking & Finance

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After HDFC Bank, it may be the turn of other private sector banks including ICICI Bank, IndusInd Bank, Axis Bank and Yes Bank to skip dividends for the second year in a row.

HDFC Bank, the country’s most valuable lender, has already announced its stand that it will skip dividends.

As Covid cases surge and ravage the economy, cash conservation would be the foremost on the agenda of banks, which are likely to see huge defaults.

Dividend payments

Last year the Reserve Bank of India had barred banks from paying dividends for the fiscal year ended March 2020 so that they conserve capital in view of the economic shock caused by the Covid-19 pandemic.

In his address, which included other policy measures, RBI governor Shaktikanta Das said the ban on dividend payment will help banks conserve capital.

Covid woes: Banks may skip dividend payments for the second year

“It is imperative that banks conserve capital to retain their capacity to support the economy and absorb losses in an environment of heightened uncertainty,” Das said.

“It has, therefore, been decided that in view of the Covid-19-related economic shock, scheduled commercial banks and cooperative banks shall not make any further dividend payouts from profits pertaining to the financial year ended March 31, 2020 until further instructions.” Though there is no RBI restriction yet on dividend payments, banks are likely to skip payments this year too to conserve cash.

In respect to dividend payments, Yes Bank, and HDFC Bank are ahead of other banks. Their dividend yields since FY2011 are in the range of 0.65-1.93%. Banks including Axis, IndusInd, ICICI come next in line in rewarding investors.

For HDFC Bank, this is the first time in the last one decade at least that the lender, of its own, did not offer any dividend. Even in FY20, it had offered an interim dividend before the RBI barred banks from announcing dividends.

Acute stress


Given the second Covid wave all over the country, non-performing assets (NPAs) or bad loans of public sector banks (PSBs) could cross 18 per cent if there is deterioration in economic activity due to the pandemic, former RBI deputy governor has H R Khan said.

As per the Financial Stability Report released by the Reserve Bank of India (RBI), the NPAs of the banking sector were projected to surge to 13.5 per cent of advances by September 2021, from 7.5 per cent in September 2020, under the baseline scenario.

The report had warned that if the macroeconomic environment worsens into a severe stress scenario, the NPA ratio may escalate to 14.8 per cent.

With regard to public sector banks, Khan said the latest Financial Stability Report indicates that NPAs can go up to 16 per cent in severe case scenario but extreme case scenario has not been portrayed this time.
“Given the second wave all over the country, I think the extreme case scenario is something which one has to factor in. So, 18-20 per cent NPL (non-performing loan) is not ruled out for public sector banks.

“So, systemic risk is something which the government does not want to take upon its shoulder,” he said.

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Why HDFC deposits are a safe option for senior citizens

Personal Finance

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The prevailing low interest rates on deposits have been pinching senior citizens the most. Seniors who are more keen on capital conservation than higher interest rates can consider the deposits from HDFC. Currently, HDFC offers seniors 6.1 per cent interest for 24-month deposits

Depositors who wish to get regular payouts can opt for the non-cumulative option, with monthly/quarterly/half yearly or annual payouts. Those who don’t need regular payouts, can instead opt for the cumulative option which offers annual compounding.

The minimum amount that can be deposited with HDFC for a fixed deposit is ₹20,000.

While the deposits of HDFC, an NBFC, are not covered by deposit insurance (bank deposits of up to ₹5 lakh are covered by DICGC), its 40-year plus stable business provides significant confidence. Besides, the company has been maintaining a AAA rating on its deposits for more than 26 years.

How they fare

As interest rates have almost bottomed out, they are likely to inch up in the next two to three years. Hence, at the current juncture, it is wise to lock into deposits with a tenure of one or two years.

For such tenures, HDFC offers seniors better interest rates than those offered by prominent banks such as SBI (up to 5.6 per cent), HDFC Bank (up to 5.4 per cent), ICICI Bank (up to 5.5 per cent) and Axis Bank (up to 6.05 per cent), which are considered safest options among banks.

Other private sector banks and small finance banks, however, offer even higher rates (up to 7.5 per cent) for one to two year deposits. The recent debacles at YES Bank and other co-operative banks have stoked fear in the minds of depositors. Given that, seniors may prefer safety of capital over the lure of higher rates.

HDFC also offers better rates compared to corporate FDs with similar ratings from other NBFCs such as LIC Housing Finance, that offers up to 5.9 per cent for a tenure of up to 2 years.

About HDFC

Incorporated in 1977, HDFC, a housing finance company currently offers loans to individuals (comprising 76 per cent of the loan book) and corporates (6 per cent). HDFC also lends for construction finance (11 per cent) and lease rental discounting (7 per cent).

With an outstanding loan book of ₹,52,167 crore as of December 2020, HDFC is India’s largest housing finance company. HDFC’s non-performing assets (proforma) are contained at less than 2 per cent. In addition to that, the company’s provisions (cumulative including those related to covid) cover up to 2.56 per cent of the loan book exposure.

As at the end of December 31, 2020, HDFC’s capital adequacy ratio stood at 20.9 per cent, well above the regulatory requirement of just 14 per cent.

HDFC also has several financial subsidiaries –prominent ones among them are HDFC Bank, HDFC Asset Management Company, HDFC Life Insurance, HDFC Credila and HDFC Ergo. Its consolidated profits at the end of the first nine months of FY21 stood at ₹1,33,900 crore.

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